A Good Public Relations Program Recognizes That The

question 153

Multiple Choice

A good public relations program recognizes that the:

• A)company must not ever admit fault.
• B)firm must be willing to make changes in its policies and procedures.
• C)firm must be independent of production and service activities.
• D)it's unsafe to trust the media since it profits by selling bad news.

Understand the concept of incremental cash flows in evaluating a new project and distinguish between relevant and irrelevant costs.

Calculate and interpret the impact of adding a new product line on existing sales and understand cannibalization effects.

Calculate the net present value (NPV) and internal rate of return (IRR) for a given project.

Understand and calculate operating cash flows using different approaches (e.g., top-down, bottom-up).

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Definitions:

Economies of Scale

The cost advantage achieved when production becomes efficient, as the scale of production increases, leading to a reduction in the average cost to make each unit.

Diseconomies of Scale

A situation where, as a firm becomes larger, its costs per unit increase due to inefficiencies that arise from its growth.

Constant Costs

The costs that remain unchanged as the level of output or production increases or decreases.